Digital Darwinism was published in April to some acclaim. Goodwin is Head of Innovation for Zenith Media, a master of the pithy aphorism and a twitter-era contrarian. My question on picking up the book was whether there would be depth behind the soundbites.
I’m pleased to say there is. It’s packed full of ideas to help us think about business in these ‘accelerated times’. Goodwin contextualises 2018’s digital world by looking at the past, drawing learnings from the adoption of previous ‘new’ technologies like electricity.
What is Digital Darwinism?
The core idea is that technology changed the parameters for business success:
- The mass adoption of networked computing has supercharged competition: it’s never been easier to try a new provider in any category.
- Companies are designed to evolve slowly over time, but the speed of technology means the background for business changes faster than any company can.
- New players, defined by their tech-enabled customer centricity are like invasive species, quickly coming to dominate once stable ecosystems.
- To survive, established players shouldn’t aim for incremental change, slowly breeding-in hybrid vigor. They need to look further ahead and get used to reinventing and re-reinventing what they offer.
Natural agility is not enough
Incumbents too often tinker around the edges, sprinkling a layer of tech on top of old problems (‘hey, let’s do something with chatbots’) rather than starting at the root of the issue, user needs. Indeed, when it comes to innovation incumbents are at a double-disadvantage. The incentives are misaligned. With success comes complacency:
“We live in the age of insurgents, who use last mover advantage to deploy the latest, best and cheapest tech and who take advantage of new behaviours… The insurgent isn’t bogged down with expertise. What in theory should allow dominant players to win easily often acts against them… you are so invested in the old paradigm, that you actively seek to combat change. Sony made too much money from selling music. Kodak from selling photo products.”
Asking the questions no-one else is asking
Digital Darwinism is a mindset. The mega-cap tech firms re-imagined established categories by asking questions no-one else was asking, changing parameters of the design process. Goodwin cites the Tesla Model S by example: with fewer than 20 moving components compared to 1500 in a standard car, it takes a sixth of the time to assemble. We’re urged to learn from this audacity. Forget how you currently operate & consider what your company would be like if you started from scratch. Be hard on yourself. Would you do the same things?
Value is different in the digital age
We’re so overburdened with choice in every conceivable category that managing abundance and aiding discovery is what people really need. The consequence? The content gateway is more important than the provider. Examples abound. I shudder to say it, but I know people who know which playlists they like, but not which artists.
“Value is different in the digital age. I use a slower more expensive train to visit my parents because it has wifi and plug sockets. My time is most valuable.”
He’s particularly good on trends
In his view business success emanates from empathy and human understanding, not technology.
“Innovation has always been misunderstood to mean more. We thought that Nokia was innovative because they made 72 handsets a year, until Apple made a single one and it changed the world. The collective goal of companies has to shift from doing extra, to work hard on doing less, better.”
Indeed, Goodwin urges us to think harder as we look forward. He is scathing about much trend prediction which he dismisses as chartism – the mindless extrapolation of existing trend lines. Assuming you are right because you have a lot of data is absurd:
“We think data will light the way but increasingly it is blinding us…”
“If you ask people about something that doesn’t yet exist, you get something worse than useless – you get something damagingly misleading…”
“Data does an excellent job of mapping the past and the current, but a terrible job for those who need to look ahead…”
I really liked his material on second & third order effects, which make the dance and interplay of trend and counter-trend much clearer. Craft beer makes sense when all the mass market wants to give you is Bud Light; farmers markets make sense in the era of stack it high, sell it cheap retail.
But… winners may not remain winners
The missing element may be a recognition that winners may not remain winners. Volatility is baked-into networked capitalism. As David Karpf writes in Wired “In the rush to identify the next industry that will be disrupted by the digital revolution, we underrate how fragile the business models of the disruptors themselves tend to be.”
Taking the long view from my research, in 2007 Bebo was the teen’s social network of choice; in 2017 the teens I researched only talked about Instagram. Facebook occupied the middle years. Envisage a world where Facebook’s success ebbs away because young people see it as something “for old people – like mum or dad…”
Goodwin comes across as a frustrated idealist, wanting us to do better. It’s an enjoyable read, and provides helpful context to think more clearly about the parameters of business success in 2018. But don’t expect a blueprint. Goodwin helps us map the terrain. The route we’ll have to plot for ourselves.
Addendum: other books worth reading about tech-enabled business
Zero to One by Peter Thiel
Thiel was co-founder of Paypal and is now a venture capitalist, famous for being the first outsider to invest in Facebook. He’s from what you might call the muscular individualist school of capitalism. Depending what you read he may also be a genius suffering from survivor bias and a lack of empathy. Zero to One is slim, crisp and highly readable. Like Goodwin he is no fan of incrementalism. The sections on how Paypal succeeded, power laws and his four scenarios for the future are all highly thought-provoking.
The Inevitable by Kevin Kelly
Idealist, hippie sage Kelly takes us through 12 technological forces which will shape the future. Written in 2014 it feels slightly optimistic in the era of bot-created fake news, but his commentary on AI, “flows” and how screens affect our behaviour is superb.